Montreal Manufacturing makes a component called B2040. This component is manufactured only when ordered by a customer, so Mississippi keeps no inventory of B2040. The list price is $113 per unit, but customers who place "large" orders receive a 14% discount on price. The customers are manufacturing firms. Currently, the salespeople decide whether an order is large enough to qualify for the discount. When the product is finished, it is packed in cases of 10. If the component needs to be exchanged or repaired, customers can come back within 14 days for free exchange or repair. (Click the icon to view the activities and cost drivers.) (Click the icon to view the data.) Read the requirements. Requirement 1. Calculate the customer-level operating income for these five customers. Use the format provided. Prepare a customer-profitability analysis by ranking the customers from most to least profitable. Begin by calculating the customer-level operating income for these five customers. (For accounts with a $0 balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering operating losses.) A C B D E Gross margin Data table The full cost of manufacturing a unit of B2040 is $93. In addition, Montreal incurs customer-level costs. Customer-level cost-driver rates are shown below: Order taking Product handling Rush-order processing $340 per order $14 per case $560 per rush order Exchange and repair costs ges Get more help $85 per unit Print Done Requirements Data table Information about Montreal's five biggest customers follows: Number of units purchased Discounts given Number of orders Number of cases Number of rush orders Number of units exchanged/repaired - X Customer A B D 5,700 2,000 1,300 4,300 14% 14% 0% 14% E 7,700 14% on half the units 4 14 53 23 22 550 220 140 470 860 3 7 2 0 6 17 60 14 40 170 All customers except E ordered units in the same order size. Customer E's order quantity varied, so E got a discount part of the time but not all the time. 1. Calculate the customer-level operating income for these five customers. Use the format provided. Prepare a customer-profitability analysis by ranking the customers from most to least profitable. 2. Discuss the results of your customer-profitability analysis. Does Montreal have unprofitable customers? Is there anything Montreal should do differently with its five customers? Done Christina replied to a message SFS Support Team / General